The post comes to us from Matt Bowen, a new guest contributor to Omni Talk. Matt Bowen is curious about all things consumer goods. He currently operates Bowen & Co. Consulting, focusing on eComm/consumer goods business strategy.
Amazon Prime Pivoting from Packages to Publicity
Amazon’s Prime Day 2019 broke records, selling roughly 175 million items in the 48-hour frenzy. This isn’t a shock — these days it’s hardly news from the eCommerce Goliath. What consumers should pay attention to is Amazon’s pivot from packages to publicity when it comes to Prime. Amazon may be the only company in the Western world that could pull something off like Prime’s pivot so gracefully yet so vigorously.
It’s not about the packages — it’s about the media. It’s not about the outside media attention, for better or worse, that Amazon receives surrounding Prime Day — it’s about Amazon turning Amazon Prime into a full-blown media force.
The Seattle, Washington company has predicated itself on being “The Everything Store.” What’s often disregarded is that Amazon has a three-headed river delta feeding its ocean of revenue. It’s backbone, eCommerce, is what most may think of first and on what Amazon Prime was pegged. Amazon Web Services(AWS) is the second, i.e. cloud-computing component that brought in $7.7B in Q1 of 2019. The third, is advertising. Amazon has opened up an “ad solutions” functionality that allows its third-party sellers to advertise within Amazon.com. Reported Q1 2019 earnings here was $2.7B.
While ads within Amazon may not raise many eyebrows from typical consumers — Amazon is starting to turn up the heat on media appeal, from all angles. For sellers on Amazon, playing the advertising game is becoming the status quo. Advertise within Amazon and sales occur.
More so, as seasoned-Amazon seller Ryan Mulvany (along with others) have started to notice, Amazon is becoming a social media site.
Ads within the website are one thing — but what were the two biggest names that stuck out for Amazon Prime Day 2019?
Swift performed a Prime Day concert and Gaga launched an Amazon-exclusive cosmetics line — which was just a pre-order event that doesn’t even ship until September.
Looking at the in-Amazon social media-like listings and pulling in mega stars like Gaga — Amazon appears to be taking a page from Instagram (shopping) and Shopify (Jenner makeup) at the same time.
Another major indicator that Amazon Prime is more focused on grooming its audience’s expectations for media moments rather than quickly-delivered packages — Twitch.(which happens to be owned by Amazon), the “live streaming platform for gamers,” streamed hours of Amazon Prime deals, along with offers on gear that were attractive to gamers.
Ever wonder about Twitch’s clout? Viewers live streamed 2.72 billion hours of content on Twitch in Q2 of 2019. 2.72 billion. This accounted for 72% of the category’s market share, with rivals such as YouTube, Facebook, and Microsoft accounting for a much smaller piece of the pie. Estimates for revenue in the video game industry were $152.1 billion in 2019 alone.
Free shipping is what Amazon Prime members know best. What doesn’t get talked about enough though is Amazon Prime Video. Being that we’re in the peak era of “TV” content — Prime Video is the absolute future to retaining current and attracting new Prime members. It’s easy to see the allure of Twitch to Amazon — future members appear to be plentiful.
What’s next for Prime Video?
More video games and sports. Plain and simple.
It’s no secret live/exclusive sports content is the trillion-dollar whale in the broadcasting industry and Amazon is no stranger to hunting big whales. While it has dipped is toe in the content waters it may just be playing opossum right now.
Yes, AWS powers MLB Statcast, an artificial intelligence/data-driven tool that has transformed the way teams and fans discuss, decipher, and digest all things baseball. Statcast is baked into many MLB broadcasts — while it’s not the official rights holder in any way, AWS’ baited hook has been cast into the media waters.
Recently Amazon made news by announcing that it’s still “experimenting” with its sports media strategy. Don’t be duped — Amazon is likely timing the market in an attempt to delight its Prime members and to increase conversion.
With so much money pouring into sports media rights, like Disney and ESPN+ announcing over the top (OTT) plans, and seemingly every athlete launching their own media outlets, Amazon is simply waiting for the rest of the industry to tip its collective hand. It’s not hard to imagine that Prime Video will then outbid others for premier content or buy up existing rights at a steep discount from those who at one point in time “overpaid.”
Tying Twitch to sports — the NBA just named Kate Jhaveri its new CMO on July 11, 2019. Her previous post — CMO of Twitch. 1+1 = 3 for Amazon in this situation.
Prime Video, with its star-studded extravaganzas and its calculated content roster, will only get better, making Prime members forget the initial reason they subscribed.
Amazon Prime — came for the free shipping, stayed for the media.
Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.
Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.
Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.
He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."